IHT- how to avoid if you have enough wealth

In fact, I haven't a clue what you're going on about.

Maybe you're confusing them with my partner, who does come from a typically working class family and is a university professor.

ronib

Growstuff - you wrote that you don’t think your children did anything to get a head start in life. Well how on earth did they become university lecturers might I ask? It seems very disrespectful to your children to undervalue the many years of study and hard work to get to that level.

They're not. Who said they are?

ronib

growstuff you do sound heavy work as a parent. So glad to hear your children overcame their initial difficulties. Many do. Humans are remarkably resilient.

What difficulties? My children were born to two married parents, who lived in a house which would (if it were sold now) be liable to IHT. Both of us worked, so we had a reasonably comfortable life. It was only when my husband and I divorced that things started falling apart. My children were brought up surrounded by books and I always made an effort to take them to museums, they had music lessons etc. (all paid for with money earned in paid employment). They were also surrounded by people who discussed ideas and had a wide vocabulary and valued hard work. They both went to nursery full-time and state schools. Until recently, none of us ever inherited any money. They didn't have a hard start in life, but I guess they inherited reasonable genes. It's only the past 20 years which have been really hard for me financially. I just smile sweetly (and laugh internally) when people start looking down their noses at me because I know I don't need money to make me feel worthy.

Growstuff - you wrote that you don’t think your children did anything to get a head start in life. Well how on earth did they become university lecturers might I ask? It seems very disrespectful to your children to undervalue the many years of study and hard work to get to that level.

ronib

David49 but I thought you made it quite clear that private education is in some ways a disadvantage .
Pupils need adequate and good teachers - that’s the best head start - and I believe can help disadvantaged children make up some lost ground.

There are plenty of examples of dyslexics and others who have despite their genetic make up have prospered, at the other end of the spectrum those that have masters degrees fall by the wayside and never apply their education usefully.

Of course there are those that are intelligent who apply their talents to break the law, if only we could mentor them early to use the ability usefully.

GrannyGravy13

Deprivation of asset’s is a mute point

If I or anybody purchase a new car, go on multiple holidays in my/their retirement having saved during my/their working life for such things, it would be difficult to prove I or anyone had deliberately done these things to avoid IHT.

I/they/their families would have a good case for just living their best life after 50+ years of work…

As far as I know, that wouldn't be considered as avoidance. Putting your house and any assets into some convoluted trust would be. You are free to spend your money on whatever you want while you're alive.

ronib

Doodledog well go back to the original comment and see why I felt sorry for growstuff’s children.

No need to feel sorry for them. There are plenty of threads on GN about estrangement and people who have issues with their children. I'm not one of them. My children and I are very close. I'm proud of them and they're proud of who I am.

ronib

growstuff it’s okay to be wealthy- it isn’t a sin.

Where did I claim it's a sin? You're imagining things.

PS. I think my children quite like me! In fact, I know they do.

Doodledog well go back to the original comment and see why I felt sorry for growstuff’s children.

GrannyGravy13

Deprivation of asset’s is a mute point

If I or anybody purchase a new car, go on multiple holidays in my/their retirement having saved during my/their working life for such things, it would be difficult to prove I or anyone had deliberately done these things to avoid IHT.

I/they/their families would have a good case for just living their best life after 50+ years of work…

As I understand it deprivation of assets doesn't count towards inheritance tax. Gifting within seven years of death does, but you can spend what you like, so long as you don't leave yourself unable to pay for social care. I'm no expert though.

whether blowing it at the end of their lives after keeping some back 'just in case' or on a spend-as-you-earn basis

That is something most of us cannot predict.

ronib

growstuff you do sound heavy work as a parent. So glad to hear your children overcame their initial difficulties. Many do. Humans are remarkably resilient.

Oof! That was uncalled for.

I don't see anything wrong with inheritance per se. I think that wanting to give our children a leg up is an instinctive thing, and yes, attempts to squash that have always ended badly. People will find other ways if they can't leave money, and usually those ways are less straightforward.

Deprivation of asset’s is a mute point

If I or anybody purchase a new car, go on multiple holidays in my/their retirement having saved during my/their working life for such things, it would be difficult to prove I or anyone had deliberately done these things to avoid IHT.

I/they/their families would have a good case for just living their best life after 50+ years of work…

escaped

I'm sorry I used the word "pittance", it was a bad choice ("relatively small amount" would have sounded better), but this is a topic that causes me upset when people suggest that I am, at this stage in my life, deliberately depriving any government of what rightfully belongs in their coffers. Or that I was born with a silver spoon in my mouth. I am neither tone deaf, nor crass, but my opinion is built on personal experience and I feel I should be allowed to express it without criticism, and without implying I would have to pay £1 million in IHT.

I am not saying that you are tone-deaf or crass, but that your comment was, which you acknowledge. That's fair enough, we all choose the wrong word at times, and shouldn't be held to it if it is withdrawn or amended.

You are perfectly entitled to express your opinion, and you have done . Others will express theirs, though, and they may disagree, which is also ok.

I don't think anyone has implied that you would have to pay a £million in IHT. There I think it is you who has misunderstood others' posts. It is clear to me that you were saying that you would/will have to pay IHT on sums over £1m in your estate. Obviously if that estate is worth £2m that would mean paying tax on the residual £million, but there has been no suggestion that this is the case.

Allira

^free spending in earlier years^

😁 in the case of many people (ourselves included) free spending was a dream of the future as we struggled with mortgages, bringing up children and trying to clothe and feed them!

We never know what fate has in store for us healthwise either.

When does spending (taxed) money someone may have managed to save in later life after bringing up a family, paying off a mortgage, become deprivation of assets which should be carefully squirrelled away in case the state needs part of it to fill the black holes created by successive Governments?

Did you read my post?

By 'earlier years', I meant earlier than seven years before your death, which anyway has no impact on IHT - only to paying for social care. IMO the idea of 'deprivation of assets' is iniquitous, and have often said so, usually to howls of derision on here. You won't find many arguments for means-testing from me, and definitely not when it comes to people spending their own money, whether blowing it at the end of their lives after keeping some back 'just in case' or on a spend-as-you-earn basis. I think it is very wrong to penalise one and not the other.

IHT is different, IMO, as the saver/spender is not taxed - it is their heirs who pay, and only then on money above (currently) a million pounds, which only applies to 4% of the population.

Chice is available to everybody throughout their lives. Only some choices are limited by life circcumstances, whether wealth, health, what county you are born in etc etc.

Who would be a woman in Afghanistan, mo matter how wealthy?

growstuff it’s okay to be wealthy- it isn’t a sin.

David49 but I thought you made it quite clear that private education is in some ways a disadvantage .
Pupils need adequate and good teachers - that’s the best head start - and I believe can help disadvantaged children make up some lost ground.

Allira

ronib

Allira not quite accurate - very highly educated university researchers /lecturers are paid a pittance. Although for those with scientific degrees and into state of the art products, earnings can improve amazingly on joining a startup. It depends on individual motivation and interests surely?

One of my DD is a university lecturer and I believe she does earn more than a friend who works in Tesco.

It depends what grade she's on. It's also possible that the Tesco worker has more security of employment.

ronib

Allira social influencers earn more than both. There are still ways of getting into education later on in life - it’s a much more fluid process. I have known outstanding students who eventually give up a great career to stay at home with their children.

They're lucky to have that choice. Choice is often the privilege of the wealthy.

David49

Genes are of course a factor, but mentoring children to have a useful and productive lifestyle is more important, a good education is important. I’m ambivalent about private schools I know too many that all they have gained is a posh accent, a good state school is a better choice.

I have friends whose parents are well off and sent children to private schools, they have led “usefull” lives but at best all they have done is preserve the wealth, when other siblings get their share of inheritance, it’s divided up, they have not created wealth.

Being comfortable is a disadvantage there is no need to strive to create wealth, only one or two have had the entrepreneurial spirit, using existing assets to build for the future. Migrants have a very good record, starting with nothing, building a strong business quickly.

One reason I believe that Inheritance should be taxed more is because there would be more incentive for the next generation to build their own future

I wasn't even discussing private schools. My only point is that people should start from the same starting block and not pretend (as some do) that they've earned every penny they own. If people are genuinely talented and hard-working they don't need the advantage of a headstart.

MaizieD

growstuff

Maizie I know not everybody is concerned about intergenerational inequality, but I am, and - as is so often pointed out on GN - I have a right to an opinion.

I wasn't dissing what you were saying, growstuff, I agree with you. I was just remarking that there is no consensus on the need for a more equable distribution of resources.

I agree with you too. I know some people don't agree.

growstuff

Maizie I know not everybody is concerned about intergenerational inequality, but I am, and - as is so often pointed out on GN - I have a right to an opinion.

I wasn't dissing what you were saying, growstuff, I agree with you. I was just remarking that there is no consensus on the need for a more equable distribution of resources.

David49. Yes up to a point - lucky if there are sufficient good State school places now that public schools are beyond the financial reach of most aspiring middle class families.
Property prices are very high around London and the south east and only the upper middle class will be able to support children into buying a home.
Seems to me that Starmer has a real downer on the not too rich and is not tackling the very wealthy. Probably Starmer aspires to that class himself?

Genes are of course a factor, but mentoring children to have a useful and productive lifestyle is more important, a good education is important. I’m ambivalent about private schools I know too many that all they have gained is a posh accent, a good state school is a better choice.

I have friends whose parents are well off and sent children to private schools, they have led “usefull” lives but at best all they have done is preserve the wealth, when other siblings get their share of inheritance, it’s divided up, they have not created wealth.

Being comfortable is a disadvantage there is no need to strive to create wealth, only one or two have had the entrepreneurial spirit, using existing assets to build for the future. Migrants have a very good record, starting with nothing, building a strong business quickly.

One reason I believe that Inheritance should be taxed more is because there would be more incentive for the next generation to build their own future